Generational Wealth Gap

A recent census report disclosed that the wealth gap between seniors and younger Americans is at an all-time high. Those over 65 have accumulated $170,494 in total assets, while those between 25-34 had a net worth of $3,662 -- a difference of 47-to-1. Media commentators floated a variety of reasons for this supposed inequity: globalization, bad timing, and government retirement programs that supposedly transfer wealth from young to old. The real reason, I believe, has more to do with the choices that the young have made.
One of the most important generational differences has to do with home ownership. Those over 65 typically purchased homes at a time when prices were low and saw the value of their homes increase. Even with recent declines, these homeowners are way ahead on their investment. On the other hand, those who bought in at the height of the market in the mid-2000s have seen the value of their homes decline by an average of 30%. It's...(Read Full Article)